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This month, we highlight significant developments from July 2018, including the FDA’s Biosimilar Action Plan for “reducing gaming of FDA requirements or other attempts to unfairly delay competition” and the much anticipated Federal Circuit decision on tribal sovereign immunity in inter partes review (IPR) proceedings. Topics covered include FDA Advisory Committee Materials Qualify as 102(b) Prior Act, Failure to Prove Inherent Obviousness, Tribal Sovereign Immunity Does Not Bar IPRs, and more.

What Are the Top Hatch-Waxman and BPCIA Developments for July 2018?

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This month, we highlight significant developments from July 2018, including the FDA’s Biosimilar Action Plan for “reducing gaming of FDA requirements or other attempts to unfairly delay competition” and the much anticipated Federal Circuit decision on tribal sovereign immunity in inter partes review (IPR) proceedings.<h3>CASES</h3>FEDERAL CIRCUITFDA Advisory Committee Materials Qualify as 102(b) Prior Art <a target="_blank" href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-1671.Opinion.7-13-2018.pdf">Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals, LLC</a>, 07/13/18 (Fed. Cir. Nos. 2017-1671, 2017-1673, 2017-1674, 2017-1675, 2017-1676, 2017-1677, 2017-2075)In this consolidated appeal from decisions invalidating as obvious certain claims in six IPRs, appellant argued that the PTAB erroneously found certain FDA advisory committee materials qualified as printed publication prior art. The Federal Circuit affirmed, holding that substantial evidence supported the PTAB’s finding. The advisory committee meeting at issue was announced in the Federal Register and was open to the public. The Federal Register notice also provided a link to an FDA website where background and other materials were posted more than two months before the critical date. The court declined to impose an “indexing” requirement for printed publications.Failure to Prove Inherent Obviousness <a target="_blank" href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-1719.Opinion.7-13-2018.pdf">Endo Pharmaceuticals Solutions, Inc. v. Custopharm Inc.</a>, 07/13/18 (Fed. Cir. No. 2017-1719)The Federal Circuit affirmed the district court’s finding that the prior art did not render the claimed invention obvious under an inherent disclosure theory. The district court found, and the Federal Circuit agreed, that Custopharm failed to prove its case by clear and convincing evidence as to multiple elements. “[T]here was no evidence in the record that a skilled artisan could determine the nondisclosed vehicle formulation based on the reported pharmacokinetic performance profile, or that the nondisclosed vehicle formulation was necessarily a feature of the TU injection studied in the Articles.” The Federal Circuit also affirmed the rejection of Custopharm’s motivation to combine argument.Tribal Sovereign Immunity Does Not Bar IPRs <a target="_blank" href="https://dlbjbjzgnk95t.cloudfront.net/1065000/1065575/18-1638.opinion.7-20-2018.pdf">Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc.</a>, 07/20/18 (Fed. Cir. Nos. 2018-1638, 2018-1639, 2018-1640, 2018-1641, 2018-1642, 2018-1643)The Federal Circuit affirmed the PTAB’s decision that tribal sovereign immunity did not bar IPRs against patents owned by the Saint Regis Mohawk tribe. Although IPRs are a “hybrid” proceeding, the court determined that IPRs are more akin to a traditional federal agency enforcement action than a civil lawsuit in which tribal immunity would typically apply. Under controlling Supreme Court precedent, sovereign immunity does not apply where the federal government, acting through an agency, engages in an investigative action or pursues an adjudicatory agency action. Emphasizing that the PTO Director has “complete discretion” to institute review of the challenged patent the Federal Circuit determined that IPRs are like proceedings begun by an agency based on information provided by a private party. In further distinguishing IPRs from civil litigation, the court also noted that the PTAB may continue its review of a patent even if the patent owner drops out or chooses not to participate in the proceeding. The court expressly declined to address state sovereign immunity.DISTRICT COURT$10 Million Exceptional Case Award <a target="_blank" href="https://www.docketnavigator.com/document/order/ceba2b3d-edb4-483f-fa77-046d4baff9e6">Regeneron Pharmaceuticals, Inc. v. Merus N.V.</a>, (D.N.J. Civ. No. 14-cv-1650 (KBF)) – subscription requiredHaving earlier found the case to be “exceptional,” (<a href="/resources/publications/180412-top-developments-hatch-waxman.html">for further information, please see our March update</a>) in an opinion dated June 25, but released in July, the district court awarded $8,332,453.46 in attorneys’ fees, $465,390.34 in expert fees, and $1,717,100.69 in litigation expenses and costs, along with interest, to Merus.$1.5 Million in Fees and Costs to Shire <a target="_blank" href="https://www.docketnavigator.com/document/order/54b68f0a-32d3-6b37-3656-e82c8503d483">Shire LLC v. Abhai, LLC</a>, 07/011/18 (D. Mass Civil Action No. 15-13909-WGY) – subscription requiredThe district court had previously awarded sanctions for litigation misconduct based on the disclosure of corrected stability and dissolution data during trial and ordered Shire to submit a revised claim for fees and costs limited to 1) time wasted dealing with the inaccurate stability and dissolution data, 2) discovering the litigation misconduct, and 3) addressing the revised data (<a href="/resources/publications/180412-top-developments-hatch-waxman.html">for further information, please see our March update</a>). Shire requested $2.335 million and Abhai requested a reduction of $1.336 million. The court reduced the request by $833,579.59, awarding Shire fees and costs of $1,501,455.32.At-risk Launch Preliminarily Enjoined <a target="_blank" href="https://dlbjbjzgnk95t.cloudfront.net/1063000/1063385/https-ecf-njd-uscourts-gov-doc1-119113508882.pdf">Indivior Inc. v. Dr. Reddy’s Laboratories S.A.</a>, 07/13/18 (DNJ Civ. Nos. 17-7111;18-1775;18-5288 (KM) (CLW))The district court granted Indivior’s motion for a preliminary injunction in the face of a potential at-risk launch. In a prior case, construction of the terms “dried” or “drying” in the parent patent resulted in a judgment of non-infringement. The claims of the patent in suit lacked that term and the district court rejected the attempt to import a drying limitation into the claim. The court therefore found that Indivior would likely succeed in defeating arguments of claim and issue preclusion. On July 18, the court denied a motion to stay pending appeal.Antibiotic Not a Lead Compound for Coagulation Inhibition <a target="_blank" href="https://www.docketnavigator.com/document/order/02490554-a67d-d6bf-6cd8-2433b845fcae">Bayer Intellectual Property GmbH v. Aurobindo Pharma Ltd.</a>, 07/13/18 (D. Del. Civil Action No. 15-902) – subscription requiredFollowing a bench trial in this Xarelto® ANDA litigation, the court found that the asserted claims were not invalid for obviousness. One skilled in the art would not have selected a compound that was the most advanced oxazolidinone antibiotic in clinical trials as an antibiotic as a lead compound for developing factor Xa inhibitors. Rather, the skilled artisan would have selected from seven attractive leads with factor Xa activity. Nor would he or she have made any of the asserted modifications to defendants’ lead compound to arrive at the claimed compound. The court also found that multiple secondary considerations supported the non-obviousness of the claimed compound.“Ensnarement” Bars Janssen’s Doctrine of Equivalents Theory <a target="_blank" href="https://dlbjbjzgnk95t.cloudfront.net/1068000/1068602/1-17-cv-11008%20judgment.pdf">Janssen Biotech, Inc. v. Celltrion Healthcare Co. Ltd.</a>, 7/30/18 (D. Mass. C.A. No. 17-11008-MLW)The district court granted defendants’ motion for summary judgment of non-infringement of Janssen’s cell culture media patent. Janssen alleged that defendants’ process for making biosimilar infliximab infringes the ’083 patent under the doctrine of equivalents. The court disagreed, holding that the range of equivalents necessary to cover defendants’ cell culture media would also ensnare the prior art. “Undisputed and strong evidence compels the conclusion that a person of ordinary skill in the art (a ‘POSA’) would have had the ability and motivation to combine familiar ingredients from prior art cell culture media compositions in predictable concentrations to create what Janssen claims as its hypothetical invention. Moreover, the POSA would have predicted the combination’s successful results. Therefore, ensnarement bars Janssen from prevailing under the doctrine of equivalents.”FDAFDA Releases Biosimilar Action Plan; Solicits Stakeholder Input; Public Hearing on September 4thOn July 18, the FDA released its Biosimilar Action Plan, which focuses on “four key areas:” improving efficiency of the biosimilar and interchangeable product development and approval process; maximizing scientific and regulatory clarity; improving understanding of biosimilars among stakeholders; and “supporting market competition by reducing gaming of FDA requirements or other attempts to unfairly delay competition.” Regarding the last, the Action Plan promises that FDA will “take action, whenever necessary, to reduce gaming of current FDA requirements, and coordinate with the Federal Trade Commission to address anti-competitive behavior.” FDA further intends to “work with legislators, as needed, to close any loopholes that may effectively delay biosimilar competition beyond the exclusivity periods envisioned by Congress.” On July 25, the Federal Register published a notice of public hearing on September 4, 2018, “soliciting input from the public on how to facilitate greater availability of biosimilar and interchangeable products while retaining the balance between competition and innovation that Congress intended to achieve under the BPCI Act.” Read more from the FDA <a target="_blank" href="https://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApphttps:/www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/UCM613761.pdflications/TherapeuticBiologicApplications/Biosimilars/UCM613761.pdf">here</a> and <a target="_blank" href="https://www.federalregister.gov/documents/2018/07/25/2018-15859/facilitating-competition-and-innovation-in-the-biological-products-marketplace-public-hearing">here</a>.FDA Commissioner to Form Working Group to Develop Focused Drug Importation PolicyOn July 19, the FDA Commissioner announced the formation of a new working group to “develop focused drug importation policy options to address access challenges related to certain sole-source medicines with limited patient availability, but no blocking patents or exclusivities.” Read the FDA statement <a target="_blank" href="https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm613931.htm">here</a>.